The burned out Gastineau Apartments in Juneau need to be completely demolished or gutted. That’s what the Alaska Housing Finance Corp. told city officials this week, after AHFC hired an architect to look at the building with an eye toward redevelopment.
The Juneau Assembly had hoped to seize the Gastineau Apartments by eminent domain, and have Alaska Housing finance a project by a private developer to rehab the property and turn it into affordable housing.
Mark Romick with AHFC says the state-owned corporation is not likely to get involved, after the architect’s report indicated the building is not worth saving.
“From the perspective of Alaska Housing — which you know is a governmental organization that has to comply with rules for redevelopment or development of property that the private sector doesn’t have to — it wasn’t something that we could undertake without a substantial contribution of equity from someplace,” Romick said.
He said the estimated cost to demolish the Gastineau Apartments ranges from $900,000 to gut it — leaving just the exterior concrete walls in place — to more than $1.2 million to completely raze the structure. And he says those are conservative estimates.
“Whenever you get involved in rehab or demolition like that, you don’t really know what you know until you get into it,” Romick said.
AHFC can finance some mixed-use development that includes commercial space, but Romick says it’s likely not enough for a developer to recoup the cost of demolishing the Gastineau building. He says a private developer might have more luck with something like condos or commercial office space.
“We did not look at a 100 percent commercial property, because that’s not something we normally do,” he says.
So where does that leave the Assembly?
City Attorney Amy Mead this week presented three options for moving forward. Under the first two the city would still seize the property by eminent domain, then either pay to have the building demolished itself or work with a private partner to do so. The third option would be to take legal action against the Gastineau Apartments’ owners to force them to demolish it.
“The fastest way would be for us to acquire the property and demolish the property and then be able to provide a developer with a flat lot to develop,” Mead said.
Under any of those scenarios, she said the city would be unlikely to recover all of the money it spends acquiring and demolishing the building.
The Gastineau Apartments are owned by James Barrett and his mother. They’ve been slow to act on the city’s requests to clean up the building, which was destroyed by fire in late 2012. Mead says they’re also insisting that the property is worth at least $1 million more than its assessed value.
Assembly members’ reaction to the news that the building would need to be demolished ranged from the exasperated to the stunned.
Assemblyman Loren Jones said he favors the city moving forward with the eminent domain process, so the building can be torn down as soon as possible.
“We’ve had two different engineer reports, now we have an architect’s report. Each one seems to get a little worse,” Jones said. “I don’t see anyone else on the horizon in this town that’s going to do it besides us.”
But Assemblyman Jesse Kiehl urged more caution, since eminent domain requires the city to explain for what public purpose the property would be seized.
“If suddenly we have instead of a building that can be rehabbed, we have a building that must be demolished, I don’t know that this Assembly is prepared to declare which of several potential public purposes we would use it,” Kiehl said.
The Assembly asked the attorney to come back with more information at a future meeting. Members said they’d also be interested in hearing from Alaska Housing directly.
Romick with AHFC says the architect’s report from Juneau-based Jensen Yorba Lott is being finalized. Once it is, he says it will be released publicly. He estimated that would happen in a few weeks.
